Last year, while much of Latin America was feeling the impact of the eurozone recession, four of Chile’s largest financial holding companies – LarrainVial, Celfin Capital, IMTrust and Banco Falabella – launched their attacks on the promising markets of Peru and Colombia. Now that they have established operations there, what barriers must they overcome, and what should their growth strategies be?

It may not be a household name, but Magnesita is a Brazilian multinational that’s a linchpin in many a supply chain. With operations in Brazil, China, the United States, France and Germany, the minerals and refractories producer is already among the main suppliers to steel, cement and glass manufacturers around the world. Because of that, the firm’s executives have a critical perspective on everything from what’s in store for the euro to corporate leadership in Latin America, as this recent interview with Magnesita’s CFO, Flavio Barbosa, reveals.

Efforts by Pemex, Mexico’s state oil company, and Sacyr Vallehermoso, the Spanish construction company, to take control of Repsol –one of the world’s largest privately owned oil firms and the biggest energy firm in Latin America — suffered a serious setback when Luis Del Rivero was fired from his post as president of Sacyr Vallehermoso. Without Del Rivero, the pact between Pemex and Sacyr is in jeopardy. The controversy raises other questions: What is Pemex trying to achieve with the deal? And where does the firm go from here?

Alarm bells are ringing among local tourism officials in Cartagena, Colombia’s big travel destination. With visitor numbers set to dip, they have a challenge on their hands that’s as daunting as the one from several years ago when their country had become synonymous with the deadly violence of drug lords and guerillas. How well officials — and entrepreneurs — meet the latest challenge will determine whether Colombia can maintain, if not grow, its share of the global tourism market.

If large parts of Europe fall into a recession, as many experts are predicting, it is likely to have negative, although varied, effects on economies around the world. As European leaders continue to search for solutions, Wharton faculty weigh in on the impact of a eurozone recession, as well as the pros and cons of the recovery measures that are up for debate.

Shortly after she was recently re-elected president of Argentina, Cristina Fernandez de Kirchner paid a visit to Coninagro, one of the main agricultural federations that opposed her government’s 2008 plan for imposing withholding taxes on agricultural exports. That plan was ultimately overturned by the Argentine government following strong protests from the agricultural sector. Yet Argentina’s grain producers are still facing challenges to their competitiveness because of rising prices for their inputs, an inflation rate of close to 25%, distortive taxes and other factors that mostly affect small producers.

Lawless mining camps are springing up across the fringe of the Amazon, creating hotbeds of forced prostitution and astronomical levels of pollution. Laborers work in contaminated mud pits and end the day breathing mercury fumes as they purify gold in open oil drums. Yet many miners defend such “artisanal mining” as one of the few paths out of poverty in rural South America. Companies, nongovernmental organizations and governments are learning how to shift mineral production from small-scale outfits to bigger, more easily regulated operations, but there are no easy solutions.

Concha y Toro industry veterans like CFO Osvaldo Solar Venegas could be forgiven for feeling a sense of vindication. In contrast to multinational competitors, they consciously crafted a risk management strategy several years ago focusing Concha y Toro — Latin America’s biggest wine company today — on a narrow portfolio of internationally appealing brands. Rivals may want to emulate that formula for success, say experts. But challenges remain, including delivering more and more shareholder value out of every bottle sold, whether at home or abroad.

On October 12, Chilean government-owned Codelco, the world’s largest producer of copper, surprised markets by closing a multibillion dollar deal with Japanese multinational Mitsui & Co. In the deal, Codelco exercised its purchase option for 49% of the shares of Anglo American Sur (AAS), the Chilean subsidiary of U.K.-based mining company Anglo American. Although the agreement would resolve significant problems for the Chilean mining firm, in an unexpected turn of events, the deal was suspended after AAS then sold a 24.5% stake in its properties in central Chile to Japan’s Mitsubishi for a price of US$5.39 billion. What’s at stake for Codelco and the other players?

The countries of Latin America have managed to do a good job of dealing with the global economic crisis. Their growth rates have remained robust — thanks, among other factors, to China, which has shown a voracious appetite for the region’s raw materials. In the short run, Latin America’s relationship with China has been beneficial, but experts warn that depending so much on a single economy such as China’s — or on exports of primary products — can generate problems over the long term. This is especially true, they say, if the region’s governments are unable to establish solid foundations for growth in the future.

About Eye on Latin American Finance

“Eye on Latin American Finance,” an editorial and research-based website, sponsored by Deloitte, is focused on identifying and defining finance excellence in Latin America. Through articles, interviews and podcasts, finance leaders explore the current financial landscape -- and what lies ahead -- from a business and academic perspective. Finance management across Latin America is currently experiencing an unprecedented level of change, and finance leaders today must possess strategic capabilities and operational expertise. The Knowledge@Wharton Eye on Latin American Finance website provides insight into these challenges.

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